Bankruptcy
- Conceived In Biblical Times
Bankruptcy
may be defined
as the legally declared inability
of an individual or organisation to pay their creditors, who represent
a third
party which supplied, to the individual or organisation, a product or
service
for which they are legally entitled to receive full settlement.
As
part of a process
called involuntary bankruptcy, a
creditor may instigate bankruptcy proceedings against a debtor in order
to
secure the funds for which they are owed. However, in the majority of cases, such
proceedings are not required.
Under the auspices of a voluntary bankruptcy, the bankruptcy process is
initiated by the debtor, which means that it is filed by the bankrupt
individual or organisation.
In the Old Testament of
the Bible and Hebrew Scriptures, the
laws of Moses laid down that one Holy or Jubilee Year should take place
every
50 years. Accordingly, on this day, all debts would be expunged from
all Jews,
and all debt slaves would be freed from their encumbrances, this being
part of
a heavenly command.
In
fact, the Hebrew, or
Jewish law of debt forgiveness, can
be found in the Bible, in the book of Deuteronomy 15:1–2 which gives
gives
clear instructions on the release from debt of all encumbered
individuals every
seven years. In the book of Nehemiah chapter 5, there is an entry
relating to
debt forgiveness among the Jewish repatriates to
Jerusalem.
Further,
bankruptcy did
not exist in ancient
Greece,
which relates to the period from circa
1100 BC and the Dorian invasion, to 146 BC and the Roman conquest of
Greece after the battle
of
Corinth.
In such times, only locally born
adult males could be classified as citizens. Accordingly, it was only
the
fathers who were entitled to legal ownership of property. Thus, every
member of
his family would be forced into what was called debt slavery if a
father was
unable to settle his outstanding debts. This would include his wife,
children
and servants. Such a status would be retained until the creditor had
received
due compensation by way of their combined physical labour.
In
many city states in
ancient
Greece,
debt slavery was restricted
to a period of five years, and debt slaves were given the protection of
life
and limb, which regular slaves did not enjoy. On the other hand,
servants of
the debtor were not so fortunate. In fact, they could be retained
beyond the
five year deadline by the creditor and were often forced to serve their
new
master for possibly even a lifetime, usually under significantly
harsher
conditions.
The
term Bankruptcy has
its origins in the ancient Latin
word bancus, which refers to a long bench or possibly a table, and
ruptus which
means broken. The term bank originally referred to a bench.
The
first bankers
positioned this bench in public places, in
markets, fairs, and such like, and upon which they conducted their
financial
affairs. They also wrote their bills of exchange, which was a written
order by
the drawer, who withdraws the funds, to the drawee, the banker, to pay
money to
the payee, who requires the funds.
Therefore,
when a
banker’s business failed, he broke his
bank, that is to say his bench. In this way, the public would be made
aware of
the fact that the person to whom the bank belonged was no longer able
to
continue his banking business.
Bankruptcy
– How To Succeed
Peter Radford writes
Articles with Websites on a wide range
of subjects. Bankruptcy
Articles cover History, Role in Europe/US, Types, Prevention, and
Business Plans.
His Website
contains over 70
Bankruptcy Articles View
his Website
at:
bankruptcy-how-to-succeed.com
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